The Indian government has mandated that households with access to Piped Natural Gas (PNG) must switch from LPG cylinders, or face discontinuation of LPG supply.

Rationale?

1. Consumption and production:

• India’s LPG consumption is ~31 million metric tonnes (MMT) annually, of which only ~13 MMT is produced domestically from refineries and natural gas processing in India. About 90% of total demand is consumed by household consumers. So about 60 percent of the LPG demand is imported from the gulf countries notably Saudi Arabia, UAE, and Qatar.
• While PNG consumption is ~7 BCM (billion cubic meters) of which 50 percent is produced domestically mainly from Western Offshore-Arabian Sea (Largest) and Eastern Offshore-Krishna Godavari Basin, Assam, Gujarat, Rajasthan.
• Active LPG domestic connections: ~33 Crore (330 million)
  • Active PNG domestic connections: ~1.6 Crore (16 million)
• The government estimates that nearly 60 lakh LPG consumers already live in areas where PNG pipelines exist, making them immediate candidates for migration.

2. Cost:

• LPG involves multiple stages — import, bottling, storage, transport, and delivery — each adding to the final price.
• PNG, once connected through pipelines, eliminates much of this supply chain, making it cheaper for consumers.
• Government provides subsidy for LPG under Pradhan Mantri Ujjwala Yojna to ~10 Crore consumers. Moving urban consumers to PNG reduces long-term fiscal burden.

3. Environment: natural gas burns cleaner than LPG, coal, or biomass, making PNG expansion part of India’s broader plan to reduce urban pollution.